Written earlier: We believe that Luxin Venture Capital is a scarce target for A-share venture capital with both performance and favorable policy catalysts. With the country's determination to focus on building a multi-level capital market, we believe that Luxin Venture Capital will use the advantages of listed platforms and its reserves and strength over many years in terms of own capital investment and fund management to achieve long-term stable growth in performance. This article focuses on explaining our views on the company in terms of the high growth of the venture capital industry itself and the intrinsic value of Luxin Venture Capital. The reserves of invested projects are abundant, and the funds under management have reached the harvest period: as of 2016 H1, the company and the funds funded and set up by the company as the main sponsor held a total of 9 shares in listed companies, 9 proposed IPO projects, and 18 investment projects listed on the New Third Board. Among them, the market value of listed projects with a total book value of 1.74 billion yuan (as of 2016 H1 data) is about 3.6 billion yuan, or nearly 2 billion yuan in floating profit; among the 9 other proposed IPOs, Shanghai Guao Electronic Technology Co., Ltd. (Huaxin Ruicheng Investment) has passed the review by the Development and Review Commission. We believe that the wealth formed by the listed projects will provide strong support for the company's current year and future performance, and that the nine proposed IPOs mean that the company has plenty of projects to be withdrawn. Furthermore, the funds managed by the company will enter an exit period next year, and high performance growth can be expected. Fund regionalization and specialization, and exploration of overseas asset allocation. In the first half of 2016, the company and various funds managed by the company invested a total of 18 projects, with an investment amount of 705 million yuan. It is estimated that the amount of funds currently managed by the company is about 10 billion yuan. In the first half of 2016, a fund was launched to cover high-growth emerging industries such as health, new materials, and civil-military integration. In July 2016, the company's board of directors and shareholders' meeting deliberated and passed a bill to participate in the investment of the American company Intarcia TherapeuticsInc., and the Intarcia project is expected to become the company's first investment business in the US and increase the allocation of overseas assets. The construction of multi-level capital markets is beneficial to the venture capital industry, and fundraising management continues to improve. On September 26, 2016, the State Council issued a number of opinions supporting the development of venture capital, putting forward supporting opinions on broadening capital access, tax incentives, listing support, and exit channels. Specific measures to facilitate venture capital development are expected to be launched one after another. The venture capital “fundraising and management withdrawal” process has gradually improved, encouraging investors from various types of institutions such as state-owned enterprises, state-owned enterprises, insurance capital, and university funds to invest in venture capital companies and venture capital parent funds through multiple channels. At the same time, compared with the suspension of IPOs last year, the expansion of new third-board market makers to private equity institutions has also gradually cleared the exit channel for projects. Investment advice: I am optimistic that Luxin Venture Capital will continue to open up market capitalization space as a scarce target for A-shares with both performance and policy catalysts. We expect the company's net profit in 2016-2018 to be 5.31, 6.52 and 795 million yuan, up 136.82%, 22.88%, and 21.88% year-on-year. EPS in 2016-2018 will be 0.71, 0.88, and 1.07 yuan, corresponding PE 35.7, 29.1, and 23.9 times, respectively. According to the Segment Valuation Law, we gave the company's own capital investment, fund management, and the market values of Shandong Guoan Trust and Minsheng Securities held by the company were 104.1, 100, 9.3, and 1.06 billion yuan in that order. The total reasonable market value was about 22.4 billion yuan, and the target price for 6 months was 30 yuan. For the first time, coverage gave a “buy” rating!